How financial planning can help clients bridge the generation gap

The difficulties of getting a first foot on the property ladder make frequent headlines. While previous generations saw homeownership as an inevitability, for many young people today owning a home is simply an unattainable dream.

Looking up to a generation of baby boomers soaking up the sun on expensive holidays, safe in the knowledge that rental income from their second and third properties is keeping their bank accounts in a healthy shade of black, renting millennials may well be feeling hard done by.

Getting turned down for a bank loan they needed to start their very small business only serves to rub salt in the wound.

This is a reality for some, so it is hardly surprising that the £10,000 helping hand suggestion generated debate in the press, albeit perhaps a less palatable suggestion for the over-50s.

Giving children or grandchildren a financial leg-up is not the same as putting everything on a silver plate and removing a sense of pressure to work.

A comprehensive answer to the financial generation gap, including the substantial challenges of affordable housing and university fees, remains undiscovered.

While the debate will rage on about tackling these challenges, many families will not be waiting around for legislative changes in order to support their offspring. In the meantime, advisers can expect to see increasing numbers of families wishing to tackle their own inter-generational gap in fortunes.

Key points

• Millennials are finding it hard to get a foot on the property ladder.
• Inheritance tax planning can help baby boomers pass as much of their wealth down the generations.
• A range of trusts are available to help the wealthy achieve their goals. 

Advisers need to be armed with strategies to approach a redistribution of accumulated wealth.

Such strategies must take into account tax implications and the use of trusts, in order to provide solutions that will work for all the generations. 

Planning objectives 

With the grey pound burning a hole in their pockets, today’s baby boomers are enjoying their retirement and going on more long-haul and adventure holidays than their younger peers.

While no-one would want to deny a hard-working generation an enjoyable retirement, such moments give people an opportunity to reflect on their life goals.

Giving children or grandchildren a financial leg-up is not the same as putting everything on a silver plate and removing a sense of pressure to work.